Novartis, Big Pharma, and their US and EU Surrogates Throw a Triple Punch at Indian Generics.

Feb. 10, 2012

For Big Pharma multinationals like Novartis, patent and data monopolies are the geese that lay golden eggs. So what do the EU-India free trade agreement negotiations, the Trans-Pacific Partnership Agreement negotiations, and the Novartis court case against India all have in common? They are three fronts on a Pharma-commanded war against strict limitations on patent and data monopolies in general and on the India patent and data regimes in particular.

India is known as the “pharmacy of the developing world”. Over 80% of the antiretroviral medicines used against HIV in developing countries are produced in India. Generic competition by Indian companies has produced a stunning 99.4% drop in the price of the lowest cost, first-line medicines (from $10,439 to $61 per person per year). Most of the 6.6 million people living with HIV in Africa, Asia and Latin America are alive because of the steep drop in prices and resulting willingness of donors and countries to fund treatment. India’s generic industry grew during a time when it was not required to patent pharmaceutical products and thus it reproduced generic copies pre-1995 medicines at will. Unfortunately, in 1995, as a resulting of rich country pressure, India was forced to accede to new universal standards of intellectual property protection in the WTO TRIPS Agreement, but was given until 2005 is adopt standards and procedures for protecting
product patents on pharmaceutical products, which it did in the India Amended Patents Act (2005). As a result on concerted campaigning by health activists, India used multiple flexibilities to adopt the most pro-access-to medicines standards possible – much to the chagrin of Big Pharma and its US and EU supporters. In particular, India adopted very strict standards for granting patents and rejected TRIPS-plus adoption of data monopoly rights.

February is a key month for the future of the life-saving Indian generic industry, because fights on all three fronts (EU-India FTA, TPPA, and Novartis v. India) are occurring simultaneously – all with the same objective of using intellectual property rules that will target the ability of Indian suppliers to produce and export low cost generic medicines. On
February 10, 2012, during a summit in New Delhi, the EU renews its pressure on India to conclude a trade agreement that includes TRIPS-plus IP protections, particularly in terms of investor-versus-state claims, general IP enforcement measures, and data exclusivity. In sum, the EU wants to enshrine IP-right holders and other investors rights to bring private arbitration claims directly against India when their investment-return expectations are upset by government regulations or other actions. Enforcement provisions seek greater enforcement efforts by the India government, higher damages for infringements and mandatory injunctions, and more border controls that might interfere in legitimate trade of generic medicines. Concretely, enhanced border controls, could lead to the even more widespread of seizures of shipments of legitimate generic medicines at borders both in India and elsewhere. Finally, although the EU has formally dropped demands for EU-style data exclusivity (10 or 11 years of data monopoly preventing marketing approval of generic equivalents), the EU continues to argue that the equivalent of Art. 39.3 of the TRIPS Agreement be included. Such inclusion would be dangetrous, even though Art. 39.3
merely requires protecting secret data against unfair commercial use, because the EU, in bilateral enforcement activities, would quickly assert its long-standing claim that such language actually requires an extended period of data monopoly that prevents marketing approval of therapeutically equivalent generic medicines. Alternatively, investor rights clauses would allow aggrieved Big Pharma companies like Novartis to sue directly for alleged violations of EU-style data rights.

February is also a key month in the ongoing TPPA negotiations, with side meeting on IPRs scheduled in Hollywood as a precursor to major negotiation in early May in Melbourne. The US attack on India-style protections against patent monopoly evergreening is quite explicit in its leaked TPPA demands. Contrary to the direct rule of Sec. 3(d) of the India Amended Patents Act (2005), the US is trying to mandate that patent be granted on minor changes in the form, new uses, and dosages, formulations, and combinations of known chemical entities. The US also seeks mandatory patent term extensions, disallows the kind of pre-grant oppositions used so effectively by activists in India, and insists on data exclusivity and patent-registration linkage. Moreover, the US seeks to limit price control mechanisms like those currently used in India and seeks enforcement rights even more onerous than those pursued by the EU. Although, India is not technically a member of the
TPPA negotiations, it is a target – Big Pharma and the US Trade Representative are trying to isolate India in the region and eventual pressure it too to adopt TRIPS-plus and TPPA-compliant IP rules. The impact of US TPPA proposals, if successful would be devasting. Countries would be foreclosed from adopting strict standards of patentability and other pro-access measures such as those adopted by India and thereafter copied by the Philippines. Accordingly, for example, Viet Nam would not be able to produce generic versions of medicines to treat hepatitis C that are so desperately needed. In addition, the TPPA IP provisions would become the template for all future regional and bilateral trade agreements that would ultimately encroach on India as well.

What the USTR is attacking indirectly in TPPA patent proposals, Novartis is doing directly in its February 28, 2012, hearing at the India Supreme Court where it is looking to eviscerate Sec. 3(d). Having lost its first bite at the apple challenging the constitutionality and TRIPS-compliance of Sec. 3(d) (adverse court decision in 2007), Novartis has single-mindedly pursued a separate appeal of the India Patents Office’s denial of it patent application on a blockbuster cancer medicine, Glivec. Here, Novartis is not content to claim that Glivec is patentable under the current interpretation of Sec. 3(d), which requires that patents on new forms or new formulations of existing medicines not be granted unless there is “significant enhancement of efficacy in terms of treating human disease.” Instead, Novartis is attempting to gut Sec. 3(d) – and thereby access to affordable generic equivalents – by arguing that Sec. 3(d) should be reinterpreted to require only minor improvements in bioavailability, solubility, or stability in order to obtain a new 20-year monopoly. Despite oppositon to its evergreening by the scientists who invented Glivec, Novartis piously defends its lawsuit as preserving R&D incentives and as guaranteeing its right to sell a high prices to India’s growing middle class. But the fact is that an eviscerated Sec. 3(d) will open the floodgates to patents on trivial changes to existing medicines across the board. Unfortunately, this risk does not deter Novartis’s relentless pursuit of monopoly profits – afterall, its monopoly pricing of Glivec is ten-times the cost of generic equivalents and that extra 90% is pure gravy.

Although there are three front to the IP-maximalization campaign and three different frontline protagonists, Novartis plays a pivotal role in all three battles. US and EU trade negotiators are both heavily lobbied by pharmaceutical companies, including Novartis, and by pharmaceutical associations like PhRMA and IFPMA of which Novartis is a member. Novartis is stepping in front of the curtain in its court case, much as 39 drug companies did when they sued the South Africa government in 1998 for trying to legislate improved access to cheaper medicines. Activists in India and a global coalition of IP and access-to-medicines campaigners are calling for coordinated action to confront Novartis and other Big Pharma players and their US and EU trade surrogates in all three venues. Protests are already occuring concerning the EU-India FTA. There were protests this week in Hollywood against the TPPA. And activists will protest globally against Novartis on February 23, the day of its annual shareholders’ meeting in Basel, Switzerland. These and similar protests must continue lest unfettered greed guarantees profits and pills for the rich and misery and death for the poor.

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